Natura &Co reported its financial results for the fourth quarter and full year 2024. Consolidated net revenue in the fourth quarter reached $1.3 billion, up 16.1% from the same quarter in 2023. Constant currency net revenue growth was fueled by strong performance of the Natura brand and partially offset by the continued declines in the Avon Hispanic markets and Home & Style category. Fourth quarter net loss was $1.3 million, a significant improvement from $470 million last year.
The Natura brand in Brazil saw a 21.1% year-over-year increase during the fourth quarter, which the company says was driven by productivity and volume gains boosted by increased cross-selling, marketing and innovation investments. Retail sales saw a robust growth and the brand expanded to 145 corporate stores, an increase of 33 stores from Q4 2023, and 863 franchised stores, an increase of 90 stores from Q4 2023.
In Hispanic LATAM, Natura reported a 33.5% year-over-year revenue increase in constant currency. Excluding Argentina, that increase resided in the “mid-teens” and was accelerated by revenue growth in Mexico.
The Avon beauty brand in LATAM remained flat. In Brazil, revenue was down 1% year over year and in Hispanic LATAM, it was up 1.7%. Avon Home & Style was down 24.6% year-over-year.
“In support of Avon Products Inc.’s voluntary Chapter 11, a cash payment of $34 million was made, as previously disclosed to the market,” said Fabio Barbosa, Natura &Co Group CEO. “In addition, the company acquired back Avon International entities outside the US through a $125 million credit bid. On the operational side, Avon International continued to deliver a lackluster performance during the quarter, facing top-line headwinds that further impacted the profitability of the business unit. On Avon International, we continue to study strategic alternatives for a potential separation/sale of the asset, while the team continues to work on an accelerated restructuring of the business and minimizing cash outflow in the short term.”
The company announced a staggered “Wave 2” implementation as it discontinued Natura’s multilevel commercial model during the fourth quarter and replaced it with a bilevel commercial model. This strategic move was what the company described as a “crucial step towards the unification of Natura and Avon sales channels.” Brazil remains pre-Wave 2 implementation.
Consolidated net revenue for the full year 2024 was $4.2 billion, a 21.5% year-over-year increase.
“In a nutshell, our goals remain the same,” Barbosa said. “First, LATAM continues to progress in improving margins and free cash flow while investing in strategic projects that will drive sustainable revenue growth. Second, we will keep simplifying the company’s corporate structure and resuming studies on strategic alternatives for Avon International. Finally, we remain laser-focus[ed] on capital allocation, striving for an optimal capital structure that supports ROIC-driven investments while delivering returns to shareholders.”
